Like all school districts, officials in Homewood District 153 are waiting for Illinois legislators to decide what support schools will receive in the next state budget.
Although Gov. Bruce Rauner approved the education line of a proposed budget guaranteeing schools will open on time, the district doesn’t know exactly how much money it will receive in state aid. And there is still the question of pension reform looming.
School districts’ main sources of revenue are local property taxes and state support.
Homewood’s property values have dropped and its share of state support has been declining, according to John Gibson, chief school business official.
All of these changes will force District 153 administrators to set a higher tax rate.
“I do know that we were getting about $4 million in general state aid prior to proration” which started in fiscal year 2011, he said. Under the new formula “we ended up with $3.6 million, so it’s a 10 percent reduction.”
“The news now is that proration will be at 92 percent. So, if we get about 8 percent less (that means) instead of losing $400,000 it should be $320,000 (this time). It’s still a reduction.
“Nothing they’re doing is having a positive impact,” Gibson added. “At least we got some certainty that (general state aid) payments will be coming in in August.”
The Illinois Board of Education sets a foundation level, considered the average cost to educate a student. The rate of $6,119 has not been increased the past three years.
State funding, paid as general state aid and low-income grants, is combined with local tax revenues to meet that threshold.
However, the state has been prorating its funding because of the massive shortfalls in the state budget. Payments to districts are prorated and paid at the maximum percentage possible given appropriation amounts.
District 153 also is limited on how much money it can raise because of the Cook County tax caps the legislature instituted in 1994. Tax caps restrict districts’ budget increases to the amount of the Consumer Price Index (CPI) or 5 percent, whichever is less.
The CPI is around 1 percent. Teachers and other professionals in District 153 will receive a 1 percent raise. The district is trying to hold down costs, although one of its major expenses – health insurance – continues to rise.
According to the Illinois Department of Revenue, tax caps are meant to “slow the growth of revenues to taxing districts when property values and assessments are increasing faster than the rate of inflation. As a whole, property owners have some protection from tax bills that increase only because the market value of their property is rising rapidly.”
But property values in Homewood and neighboring southern suburbs have dropped.
“The overall reduction of property values in our area has the effect of increasing the tax rate,” Gibson said, “because we’re getting that amount of money — the same amount of taxes as last year. Because the property valuation is lower this year, the rate calculation makes for a higher tax rate. So you need a higher tax rate to get the same amount of money on a lower property value.”
The district set its levy to collect $16.2 million in property tax revenue.
“Ultimately, we get our money from basically whatever amount of taxes were levied last year extended by the Cook County Clerk times CPI, plus we get any new property on the rolls that wasn’t there before,” Gibson explained. “Any new growth, any TIFs come back on the tax rolls. Homewood’s Central Business District TIF expired in 2014 so it’s listed as new property.”
Gibson said District 153 will have an additional $3.5 million added to its property tax rolls because the 23-year TIF is finished.